4 months, 3 weeks ago #2024
I was looking through my finances and I realize a few years ago, I had no net worth. I had a lot of nice clothes and cool car, but negative net worth. Then for some reason, I got motivated and started to manage my finances by studying and keeping track of my income, expenses, and debt. I increased my income, decrease my expenses, and paid off most of my debts.
For a few years now, I have a net worth..and didn’t realize that most of my adult life, had negative net worth. We live in a society that pretends to be rich. People think they are rich because they wear nice clothes and drive expensive cars…when all that means is that the clothing industry and car company got rich. People may fool the people around them, but basic math will tell them how much they are really worth before they go to sleep at night.
And for those of you who count your home as part of your net worth…it’s not really.. Your home is your home..you pay to live there. Yes, you can sell it and make money…but that’s only when you sell it. Home prices fluctuate and if you brought it within the last few years, are most likely to see it go down in value. When the economy crashes, you’ll either sell it for less or can’t sell it at all. You may have a mortgage and don’t have much money left at the end of the month because a huge portion of your income goes into one “investment”…and will cry if you miss a few paychecks.
True net worth is when you easily available cash and live on that for months, if not years.
4 months, 2 weeks ago #2051
This was a great read and I agree with everything. Networth is money you own minus the money you owe.
4 months, 2 weeks ago #2079
I hate accounting. Working with numbers makes me depressed. I used to do financial budgeting, but found that there are so many things that are unexpected, it’s hard to plan for everything. I’m thinking about restarting it. I used to use mint, which is a pretty sick app.
I disagree with your viewpoint when you say that having cars, homes etc don’t make you rich. It actually does despite the method of attainment. It’s all based on quality of life with a car versus without. However, I do agree that it’s better to pay everything off rather than relying on credit. But hey, that’s what’s credit for, right?
Thanks for sharing your viewpoints.
4 months, 2 weeks ago #2083
How does buying cars make you rich? Do you get paid monthly to own a car? If you’re like most people, when you buy a car, money goes out of your own pocket into the pocket of of the auto industry….they become rich. Yes, people can buy cars to display that they are rich because they are rich. However, most people are not rich, but many people try to mimic rich people by buying expensive cars to display wealth. This is why there are many luxury cars in the ghetto!
Buying a home is not as clear as a car as you’re putting money into something that may eventually become yours to sell. So yes, owning a home may add to your net worth in the long run or if you’re in the real estate business. However, most people with homes, after paying the bills put most of their money into the mortgage. They are a few paychecks from losing their homes. They think they have a high net worth when home prices go up, but when the economy tanks, it’s hard for them to sell their homes. That’s why I don’t want to add homes to net worth because your worth is truly how much money you can put on the table now and within a few days. If you need to sell you home to get money….you really don’t have much money…and that’s the typical homeowner.
In accounting, they teach you that equipments that you buy, they’re assets. They’re not! You had to pay for them so they are really liabilities. Only the profits or until they make profits, then they are assets.
4 months, 2 weeks ago #2095
A car gets you places that you wouldn’t otherwise be able to experience. With a car, you may be able to afford taking a job further away from home, go on vacations you wouldn’t otherwise be able to. And let’s admit it, public transit sucks. Sitting there with crotches in your face as you’re trying to get to your destination.
I get it, you’re trying to undermine the American financial process. It makes sense. Borrowing money sucks. What borrowing money allows you to do is experience luxury now and pay later. It also means paying more in interest. Do you even have a driver’s licence? LOL
4 months, 2 weeks ago #2118
I don’t argue that by having a car, you can drive to work and get a job further away. However, most people buy cars that they can’t really afford. Most people are living paycheck to paycheck and spending the money they have left to pay off their car loans!
My car is fully paid off and been driving it for many years with no car payments..and plan to for many many years. I bought my car initially at a low price…versus many of my poor peers who bought cars multiple times the price of mines. They are working years to pay it off…while those years I’m saving and investing….and will retire early.
4 months, 2 weeks ago #2099
It’s simple, don’t live beyond your means. Pay off all liabilities as fast as you can.
Everybody has a net worth – it’s either negative or positive
Don’t overextend yourself with a mortgage if you can’t afford it but I wouldn’t lump mortgage with other liabilities. you put money into your mortgage but you get equity in return. equity fluctuates like the stock market but it’s better to buy and hold than to sell off your property for a a lump sum. You can get passive income by having people rent from you in the future which can supplement your retirement. Same concept with stocks in your 401k/403b/IRA etc.
What’s the overall game in this rat race? retire comfortably..make sure your loved ones are taken care of when you’re gone. Otherwise, who cares right? negative net worth or not
4 months, 2 weeks ago #2119
I agree with you. However, the problem is that most people are a few paychecks away from losing their homes. Most people are living paycheck to paycheck and putting the money they have left into their mortgage. Unless they sell when the price is high, most likely the time they need to sell is during the hard times…and that’s when it’s the hardest to sell. As a result, foreclosure and stress in marriages/relationships.
This is not the worst strategy in the world, but it’s a false and weak sense of wealth. Putting all the money you have left into the mortgage and living paycheck to paycheck to own your home in 15+ years….then maybe rent out a room to your kids or bubba to make ends meet? They call it House Rich and Cash poor.
4 months, 2 weeks ago #2121
You are inadvertently dissing the American dream, which is the dream of home ownership. Are you an illegal alien? Lol
4 months, 2 weeks ago #2125
I’m not against home ownership, but I don’t agree the current way people are doing it. It’s not the worst strategy in the world, but it’s not a great strategy either. One of the biggest financial complaints people give are about their mortgages. Most homeowners are living paycheck to paycheck and paying their mortgages with the money they have left. They are a few paychecks from losing their homes. They think they have a high net worth in ONE “investment” that is very hard to liquidate during the hard times and falsely fluctuate during the good times.
The American dream is different to everybody. For me, America is the richest and most opportunistic nation on earth. You can become rich and retire young..be financially free……or you can live paycheck to paycheck putting all the money you have left into a mortgage that is ONE investment and work years to pay off a car loan.
2 months, 1 week ago #4278
when i was an hr manager before 9/11, it was customary for many an emp – like in their 40s – to come to me crying, begging for an ’emergency advance’ in order to be able to ‘bury their parent’. most of these emps had salaries around +$100K – also about twice my own.
flash forward nearly 2 decades of perpetual war, and the economic situation for most is by far even worse, with the average american household being in debt around -$150K.
the all-american dream used to be own your home and car free and clear, put kids thru college, and generously leave behind for such loved ones to inherit. ironically, only the hardest working indians, chinese, filipinos, jews – mostly 1st and 2nd gen immigrant families – nowadays actually still live up to that noble standard in this land of opportunity.
now, for the overcrowded, rather toxic masses its the opposite: afford ur rent, car, loan & credit card monthly payments, and a term life insurance that will hopefully pay out the -$10K funeral expenses when it comes. hello, lowered expectations! hello, quantity vs quality!! americans on the whole are officially & shamelessly living way, way, beyond their means. and don’t give a bloody damn about it.
congrats on getting out of having a negative net worth. wouldn’t you consider yourself financially above average? u sure sound like it! alas, words are cheap.
i agree, its not like we’re taking it with us! and the higher the net worth, the more .pita. it is to keep our will updated! huyyy
but for the sake of next of kin, and associated good intention, i’m confident once u quit beating around da bush with that cockamamie excuse against net worth somehow not equaling ‘assets minus debt’ – ya just might catch up alittle! (its obvious cash savings for now is still for the time being king over property equity; that’s a given)
now this got me wondering, how in the world does one retire early these days without selling their soul n stuff? =/
2 months, 1 week ago #4284
I don’t like averages because people with 0 or negative worth would still have higher net worth simply because people who make up the high end brings it up significantly. 1 millionaire can make 9 guys with 0 net worth look rich.
That being said, you are right, most people have negative net worth. People say that we won’t take it with us after we die….but those are the same people who are going to live the remainder of their lives and die in poverty. Most of the people who are saving are just saving enough to live a decent middle class life and die in dignity.
Still, if you want to live it up when you’re in your 50s+, you still have to be cheap when you’re young. Pretending to be rich rarely leads to being rich.
2 months, 1 week ago #4290
would ya say the same thing about average for say, cock size?!
would a smokin hot, college degreed and perhaps virgin hetero young maiden with a negative net worth due to 50K in student loans have more more net worth in your eyes than say.. a mature, divorced versatile porn star chick with no higher ed yet does have and boast of a net worth of a million bucks? (true story!)
with dates and playmates, theres some – just a few – i’ve met (ceos, celebs, techs, investors) who have net worths in the billions but in my eyes they still have a negative net worthiness even though assets are paramount to me – cuz at the same time i look way beyond material net worth in terms of friendship & relationship investments.
alas the simple definition for financial net worth remains ‘assets minus debt’ though in my opinion.
couldnt help but notice in that chart they have 0 yrs worked at 22yo.. i’ve been working since 15 and though in between switched careers, still now work in the same field did at very first as a teen! am a firm believer in just doing what ya love and everything should fall into place despite this overly material world – by living within means.
wonder what net worth is considered ‘wealthy’.. and what % americans are?
would you be surprised that virtually 100% americans are neither healthy nor wealthy??
2 months, 1 week ago #4312
Financially, the virgin is worst off, but she’s more valuable in the dating world. For me, I don’t care if a girl is a virgin and smoking hott…if she’s stupid, then she’s a piece of sh*t. Some girls think they are so great because they go to temple and save their body for their husbands..but if you’re an idiot…you’re not worth anything. Dumb girls bring your net worth down! A girl has to increase your net worth..simple as that! Some people will try to make me sound greedy and all about money..but think about it..how dumb is a girl if she’s making you lose money???
That’s true about net worth( A<span style=”color: #222222; font-family: Roboto, arial, sans-serif;”>ssets </span><b style=”color: #222222; font-family: Roboto, arial, sans-serif;”>minus</b><span style=”color: #222222; font-family: Roboto, arial, sans-serif;”> total liabilities) and I calculate it that way also. Most people don’t have a net worth because they have so much debt…they look at the new car, rather than net worth. Beyond that, it’s also how much cash you have. A lot of idiots think they are rich because they spend all the money they have left on a house. Yes, they can sell it, but it’s not that easy to sell. You can be the person who buy low and potentially sell high or the idiot who buys high and can’t sell higher. When sht hits the fan, you can’t sell because you need a buyer. That is why a lot of people end up so desperate and go around sucking dck because though they have net worth in their homes…they have nothing in cash! It’s a false belief that you are rich because you have a house. Rich people buy a lot of property, but they have a lot of money in cash. Dumb and Poor pretend to be rich by putting all their money into their property and other liabilities..and have no cash.</span>
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